Spatial Constraints on Residency as an Instrument of Employment Policy: the Experience of Limited Employment Locations in New Zealand

Abstract:

New Zealand is one of the only OECD countries to have attempted to impose spatial
constraints on residency as a policy tool in its welfaretowork
strategy. The Limited
Employment Locations (LEL) policy introduced in 2004 created 259 limited employment
location communities throughout the country in an attempt to influence the residential
location of Ministry of Social Development (MSD) clients so they are, “in the right place
at the right time to take advantage of growing employment opportunities” (MSD, 2004a,
p1). The overarching goal of the LEL policy is to get more New Zealanders into
employment (MSD, 2004b, p1) – in doing so reducing New Zealand’s overall
unemployment rate and ensuring that, at a time of low unemployment and skill shortages,
there are adequate numbers of job seekers available (MSD, 2004d, p2). Unemployment
beneficiaries have a responsibility to seek work and, according to the new policy, if they
move into any of these mostly small, rural communities without access to reliable
transport, they risk losing their benefit following the end of a sanction process. The LEL
policy thus effectively limits the portability of the unemployment benefit (UB), creating a
new geography of welfare eligibility.
Through analysis of policy documents and interviews with MSD and Work and Income
staff, this research outlines and critically evaluates the motivations and behavioural
assumptions behind the LEL policy. The research then uses the results of a
commissioned panel survey, and results of field interviews exploring the views and actual
behaviour of UB recipients, to test the motivations and behavioural assumptions behind
the policy. The research uses as its case area the Opotiki District in New Zealand’s Bay
of Plenty Region.
The research traces the evolution of the zones themselves and describes a range of
reactions to the policy. One of the primary findings of the study is the importance of
‘home’ in the motivation of beneficiaries moving to LELs, particularly Maori
beneficiaries who dominate movement to LEL areas in the district. This movement is shaped by the desire to maximise living standards and to take advantage of the social,
family, and cultural networks that these areas offer. Returning to home LEL
communities occurs in spite of the new policy and the risks of benefit sanctions that it
presents, and there is also very little evidence to date that the LEL policy is encouraging
beneficiary movement to areas of better employment prospects.